HomeMy Public PortalAboutResolution CRA 96-5951
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RESOLUTION NO. CRA 96 -595
A RESOLUTION OF THE TEMPLE CITY COMMUNITY
REDEVELOPMENT AGENCY ACKNOWLEDGING THE RECEIPT
AND FILING OF THE REVISED STATEMENT OF INVESTMENT
POLICY FOR THE REMAINDER OF FISCAL YEAR 1995 -96
WHEREAS, the California State Legislature passed legislation during the 1984 session requiring
the filing of an annual Statement of Investment Policy by local public agencies; and
WHEREAS, Governor of the State of California signed such legislation into law effective January
1, 1985 (Chapter 1226); and
WHEREAS, the Treasurer of the Temple City Community Redevelopment Agency declares the
revised Statement of Investment Policy to be as attached (Attachment A).
NOW, THEREFORE, BE IT RESOLVED that the Agency Members of the Temple City
Community Redevelopment Agency of the City of Temple City claims that a revised Statement of
Investment Policy for the Redevelopment Agency has been filed by the Treasurer for the remainder of
Fiscal Year 1995 -96.
APPROVED AND ADOPTED this 6th day of February, 1996.
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CHAIRMAN
A'1°1'EST:
1, hereby certify that the foregoing Resolution, Resolution No. CRA 96 -595 was duly adopted by
the Agency Members of the Temple City Redevelopment Agency at a regular meeting held on the 6th day
of February, 1996, by the following vote:
AYES: Member - Budds, Gillanders, Souder, Breazeal
NOES: Member -None
ABSENT: Member -Wilson
F ��
cy'Secretary
TEMPLE CITY
COMMUNITY REDEVELOPMENT AGENCY
STATEMENT
OF
INVESTMENT POLICY
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TEMPLE CITY
COMMUNITY REDEVELOPMENT AGENCY
STATEMENT OF INVESTMENT POLICY
I. PURPOSE
II. OBJECTIVE
III. SCOPE
IV. STANDARDS OF CARE
1. PRUDENCE
2. DELEGATION OF AUTHORITY
V. INTERNAL CONTROLS
VI. SUITABLE AND AUTHORIZED INVESTMENTS
VII. REPORTING METHODS
VIII. POLICY CONSTRAINTS
1. AGENCY CONSTRAINTS
2. LEGAL CONSTRAINTS
IX. POLICY REVIEW
TEMPLE CITY
COMMUNITY REDEVELOPMENT AGENCY
STATEMENT OF INVESTMENT POLICY
I. PURPOSE
This statement is intended to provide a guideline for the
prudent investment of temporary idle cash, trust funds and
restricted monies and to outline a policy for maximizing the
efficiency of the cash management system. Ultimate investment
goal is the protection of cash investments.
II. OBJECTIVE
The cash management system of the Temple City Community
Redevelopment. Agency is designed to accurately monitor and
forecast expenditures and revenues, thus insuring the
investment of monies to the fullest extent possible. Attempts
to obtain highest interest yields possible are a statement of
fact as long as investments meet the criteria required for
safety and liquidity.
III. SCOPE
This investment policy applies to activities of the Agency
with regard to investing the financial assets of all funds.
IV. STANDARDS OF CARE
1. PRUDENCE
The standard of prudence to be used by investment
officials shall be the "prudent investor" rule, which
states, "Investments shall be made with judgement and
care, under circumstances then prevailing, which persons
of prudence, discretion and intelligence exercise in the
management of their own affairs, not for speculation, but
for investment, considering the probable safety of their
capital, as well as the probable income to be derived."
The prudent investor rule shall be applied in the context
of managing the overall portfolio.
2. DELEGATION OF AUTHORITY
The authority to manage and operate the investment
program is granted to the Treasurer pursuant to Section
53607 of the California Government Code. Individuals who
may engage in investment transactions are those positions
who are authorized signatures for warrants and checks.
No other person may engage in an investment transaction.
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STATEMENT OF INVESTMENT POLICY
PAGE 2
V. INTERNAL CONTROLS
The Treasurer is responsible for establishing and maintaining
an internal control structure designed to ensure that the
assets of the entity are protected from loss, theft or misuse.
The Treasurer shall establish the investment functions so that
specific responsibility for the performance of duties and
segregation of duties are assigned with a clear line. The
functions of authorizing, recording transactions, and
performing reconciliations are handled by separate persons to
reduce the risk that a person is in a position to conceal
errors or fraud in the normal course of duty.
The current segregation of duties are as follows:
Function
Responsibility
Develop formal investment
policy
Treasurer
Review formal investment
policy
City's Auditing Firm
Adopt formal investment
policy
Agency Members
Execute investment
transactions
Treasurer, Deputy Treas.
(one of the above signers
as well as one of the
signers listed below)
City Clerk, Executive Dir.
Investment verification and
recordation
Accounting Technician II
Reconcile investment
records to bank
statements
Accounting Technician I
While no internal control system, however elaborate, can
guarantee absolute assurance that the Agency's assets are
safeguarded, it is the intent of the Agency's internal control
system to provide reasonable assurance that management of the
investment function meets the Redevelopment Agency's
objectives. These internal controls shall be reviewed
annually by the independent auditor.
STATEMENT OF INVESTMENT POLICY
PAGE 3
VI. SUITABLE ANI1 AUTHORIZED INVESTMENTS
The California Government Code (Section 53600, et seq., 53635)
allows the City to invest in the following instruments:
o US Treasury Obligations (Bill, Notes and Bonds)
o US Government Agency Securities and Instrumentalities of
Government Sponsored Corporations
o Banker's Acceptances
o Commercial Paper
o Repurchase Agreements
o Certificates of Deposit
o Negotiable Certificates of Deposit
o Passbook Savings Accounts
o Interest Bearing Checking Accounts
o Money Markets
o Local Agency Investment Fund (State Pool)
For the balance of Fiscal Year 95 -96, the Temple City
Community Redevelopment Agency is limiting its investments to
the following vehicles:
o LAIF (Local Agency Investment Fund) - a special fund in
the State Treasury which local agencies may use to
deposit funds for investment. There is no minimum
investment period and the minimum transaction is $5,000,
in multiples of $1,000 above that, with a maximum balance
of $20,000,000 for any agency. However, any investment
with LAIF must comply with other self - imposed
restrictions as specified in this Investment Policy. The
City is restricted to a maximum of ten transactions per
month. It offers high liquidity because deposits can be
converted to cash in twenty -four hours and no interest is
lost. All interest is distributed to those agencies
participating on a proportionate share basis determined
by the amounts deposited and the length of time they are
deposited. Interest is paid quarterly. The State
retains an amount for reasonable costs of making the
investments, not to exceed one - quarter of one percent of
the earnings.
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STATEMENT OF INVESTMENT POLICY
PAGE 4
The interest rates are fairly high because of pooling the
State's surplus cash with the surplus cash deposited.
This creates a multi - billion dollar money pool and allows
diversified investments. In a high interest rate market,
the City does better than LAIF, but in times of low
interest rates, LAIF yields are higher. The Agency
continually invests in the Local Agency Investment Fund.
o Certificates of Deposit - time deposits of a bank or
savings and loan. They are purchased in various
denominations with maturities ranging from 30 to 360
days. The interest is calculated on a 360 -day basis and
is payable monthly.
o Passbook Savings Account - a certificate of deposit
issued in any amount for a non specified amount of time.
Interest rate is much lower than CD's but the savings
account allows flexibility. Funds can be deposited and
withdrawn according to daily needs.
o Interest Bearing Checking Accounts - a checking account
which receives revenues and pays disbursements. Interest
earned can be paid to the local jurisdictions on a
regular basis or left in the account to offset the fees
for monthly services.
VII. REPORTING METHODS
The Treasurer shall prepare a monthly investment report which
provides a clear picture of the status of the current
investment portfolio. The report should be provided to the
Executive Director and legislative body. The report should
include the following:
a) Type of investment
b) Institution
c) Date of Maturity
d) Amount of deposit or cost of security
e) Current market value of securities with maturity in
excess of twelve months
f) Rate of interest
g) State that there are sufficient funds to meet the next 6
months' obligations
STATEMENT OF INVESTMENT POLICY
PAGE 5
VIII. POLICY CONSTRAINTS
1. REDEVELOPMENT AGENCY CONSTRAINTS
The Temple City Community Redevelopment Agency operates
its pooled idle cash investments under the Prudent Man
rule. The Treasurer will evaluate local banks and
savings institutions and may invest idle cash funds with
such institutions when the criteria for prudent
investment previously stated are met. The Agency
operates its investment pool according to State and self -
imposed constraints. It does not buy stocks; it does not
speculate; it does not deal in futures or options. It
does not purchase or sell securities or margins or invest
in derivative type products. Any investment extending
beyond a five -year period requires prior Agency Member
approval. Additionally, a minimum of 50% of the
outstanding investments must mature within a one -year
time period.
2. LEGAL CONSTRAINTS
Surplus funds must be deposited in State or national
banks, State or Federal savings association or State or
Federal credit unions within the State of California. The
deposits cannot exceed the amount of the bank's or
savings and loan's paid -up capital and surplus.
The bank or savings and loan must secure public funds
deposits with eligible securities having a market value
of 110% of the total amount of the deposits. State law
also allows as an eligible security, first trust deeds
having a value of 150% of the total amount of the
deposits.
IX. POLICY REVIEW
This Statement of Investment Policy shall be reviewed at least
annually to ensure its consistency with the overall objectives
of preservation of principal, liquidity and return, and its
relevance to current law, financial and economic trends.
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